UK EPU (Monthly, Daily, Historical)

UK Monthly EPU Index

To measure policy-related economic uncertainty in the UK, we construct an index based on newspaper articles regarding policy uncertainty.

We construct this index in a similar manner as our index based on American newspapers. Here we include 11 UK newspapers: The FT, The Sunday Times, The Telegraph, The Daily Mail, The Daily Express, The Times, The Guardian, The Mirror, The Northern Echo, The Evening Standard, and The Sun.

As with our American newspaper index, we utilize the number of news articles containing the terms uncertain or uncertainty, economic or economy, as well as policy relevant terms (scaled by the smoothed total number of articles). Policy relevant terms include: 'policy', 'tax', 'spending', 'regulation', 'Bank of England', 'budget', and 'deficit'.

Each paper-specific monthly series is normalized to standard deviation 1 prior to 2011 and then summed across papers, by month. Finally, the series is normalized to mean 100 prior to 2011.

With each monthly update, data from the preceding two months may be revised slightly, as well. This is driven by the fact that some online newspapers do not immediately update their online archives with all articles, leading to slightly changing totals for the previous 1-2 months.

UK Daily EPU Index

Our daily newspaper-based Economic Policy Uncertainty (EPU) Index for the United Kingdom draws on the digital archives of the Access World News NewsBank service.

This service includes coverage of about 650 U.K. newspapers, ranging from large national papers like the Guardian to small local newspapers across the United Kingdom. Our Daily UK EPU Index runs from the beginning of 2001 to the present.

To construct the index, we obtain the daily count of articles that contain at least one term from each of three term sets. The first term set is economic or economy. The second set is uncertain or uncertainty. The third set is spending, deficit, regulation, budget, tax, policy, or Bank of England.

The number of newspapers that NewsBank covers has drastically increased over time. To correct for this growth we scale the number of economic policy uncertainty articles by the total count of all articles (in the same set of newspapers). Finally, we normalize this index so that its average value in 2015 matches the average 2015 value of our UK monthly index.

Historical UK EPU Index

This index reflects data from two major newspapers from the United Kingdom, the Times of London and the Guardian.

To construct the index, we perform month-by-month searches of each paper, starting in January of 1900, for terms related to economic policy uncertainty. In particular, we search for articles containing the term 'uncertainty' or 'uncertain', the terms 'economic', 'economy', 'business', 'commerce', 'industry', and 'industrial' as well as one or more of the following terms: 'tax', 'policy', 'regulation', 'spending', 'deficit', 'budget', 'Bank of England', 'war', or 'tariff'. In other words, to meet our criteria for inclusion the article must include terms in all three categories pertaining to uncertainty, the economy and policy.

To deal with changing volumes of news articles for a given paper over time, we divide the raw counts of policy uncertainty articles by the total number of news articles in the paper for a given month. We standardize each newspaper-level scaled series to unit standard deviation from 1900 to 2008 and then average across the two papers by month. Finally, we normalize the two-paper series to a mean of 100 from 1900 to 2008.

To construct his index, Lennard searches the digital archives of the Daily Mail, The Guardian and The Times from January 1920 to December 1938. He obtains monthly counts of articles that contain at least one term from each of the following three terms sets: Economy ("business", "commerce", "commercial", "economic", "economy" or "industry"), Policy ("Bank of England", "Bank Rate", "budget", "deficit", "duty", "policy", "regulation", "spending", "tariff", "tax" or "war") and Uncertainty ("uncertain" or "uncertainty"), including close variants of these terms. He then divides these counts by the total number of articles in the same newspaper and month to obtain a scaled monthly frequency count for each paper from 1920 to 1938. For each newspaper, he standardizes the monthly series for the raw scaled frequency counts to unit standard deviation over time. He averages the standardized series over the three papers by month to obtain an aggregate index and, in the final step, normalizes the aggregate index to a mean of 100.

This index differs slightly from the UK historical index constructed by Scott R. Baker, Nicholas Bloom and Steven J. Davis. First, Lennard expands the number of newspapers to include the Daily Mail, which was the biggest newspaper in the world at the time in terms of circulation. Second, he enlarges the set of policy terms to include "Bank Rate" and "duty", which were commonplace terms in the interwar period for the main instrument of monetary policy and tariff policy, respectively.